Consumer Sector Q1 Results Review - Steady Volume Recovery, Rural Growth Drive Margin Expansion: DRChoksey

Deven Choksey Research Report

In Q1 FY25, our coverage universe reported a healthy revenue growth of 7.1% YoY, surpassing our estimates by 0.1%. This reflects an uptick in demand and consumption trends. Notably, volume growth YoY improved significantly, with rural markets outpacing urban markets for most companies.

Given the stable macroeconomic conditions and favorable monsoon outlook, we are confident in projecting continued volume growth over the upcoming quarters. However, it's important to note that the growth in revenue will be influenced by various product categories and individual companies.

Severe heat waves and election-related restrictions have impacted out-of-home consumption categories such as home improvement, beverages, and paints.

Consumer companies are driving revenue growth through distribution, new product launches, and brand promotions.

The outlook for rural markets continues to be positive for FY25E.

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